Identifying alternative (ALT) parts for your bill of materials

Each item in PDXpert PLM
software has a Source list, which may contain any number of approved
supplier items that can be sourced for that item. Each approved item can be
ranked relative to its peers and include its own rich data, including part
number, data record revision, cost, and datasheet file attachments.

This
application note describes how to take full advantage of PDXpert software's
Source list to identify parts used both company-wide and in
application-specific bills of materials.

Basics of supplier source identification

Purchased parts often represent the bulk of a unique product's
components. Screws, resistors, paint, and other off-the-shelf items are
acquired to fulfill standard functions. Often these parts are available at
little cost from several different mass producers, any one of which would
be equally suitable for supplying a useful product.

By definition, every purchased part in your warehouse should have at
least one, and preferably several, approved supplier parts. Multiple supplier parts
are interchangeable
with each other when their relevant functional and
physical properties are equivalent. Part interchangeability - that is:
form, fit, or function equivalence - implies that any approved source can be
used for the application. (For a
complete discussion, see
Applying principles of interchangeability to your bill of
materials.)

Some approved parts may have attributes that are irrelevant when placed
into your intended application. Occasionally, those irrelevant properties
will actually increase the cost of the item, such as when a 100Ω, 0.1% tolerance
resistor is used in place of 100Ω, 2% resistor. In this case, you may want to
assign a source rank
that indicates to your Purchasing team how you judge the relative merits of the
interchangeable sources.

After you've identified your purchased part's sources and validated that
their specifications meet your purchased part's requirements, they're
approved on an engineering change form and can be used in production.

Application-specific alternative parts

The interchangeability of sources considers how the item is used in a specific
application. In general, it's best to consider the specific application as
broadly as possible for all expected uses: you don't want to have to carefully examine the
original requirements for a 10µF 10WVDC aluminum electrolytic capacitor
each time it's applied to a new design.

However, in some cases, a specific application can accept a part that
would not be equivalent in all possible situations. For example, a specific
assembly may be able to accept a 12mm screw length even when an 8mm screw is
preferred. Clearly, a 12mm screw is not completely interchangeable in all
applications with an 8mm screw, but it may be fine where the extra length
does no harm. Moreover,
if the production line is stopped, it may be essential to provide a workable
substitute for a preferred item. This substitute is commonly called an
alternative ("ALT") part.

Problems with traditional attempts to identify ALT parts

An ALT part has always been a specific solution applied to a specific
bill of materials. Intuitively, most design engineers believe that the
easiest representation of the part alternatives would be to simply add them
to the place they're needed, on the affected BOM.

The goal is great. However, the reality is that adding an ALT to the bill
of materials is often meaningless, and perhaps even risky.

Consider how the manufacturing system works: parts listed on the BOM get
translated into a demand based on their quantity, which is then multiplied
by the number of assemblies to be produced. How does the MRP system
translate an alternative part, possibly listed on the BOM with quantity of 0
or a unit of measure ALT or
A/R, into a purchase quantity? In most
cases, it doesn't. What happens if the quantity and units are useful (like
7 ml) or the ALT unit is converted to
each?
Possibly both the preferred and ALT will get purchased for the same
purpose, with unhappy effects on your inventory.

The manufacturing team may have a standard method for dealing with these
problems. They may simply filter out all of engineering's alternative parts,
or accept them at zero quantity. Neither of these is likely to support
actual buying activity, so Purchasing may also get the engineering BOM
with the hope that it'll be remembered months or years in the future. More
likely, Engineering will get a request for help, or production will simply
be delayed waiting for the preferred part. Engineering's efforts are, at
best, occasionally used but often wasted.

Phantom parts: How to identify BOM-specific ALTs with non-inventoried
parts

Returning to first principles, we know that a part number is assigned for
each unique part. If the application of a part is new, then a new part
number should be created.

Alternative parts are simply a set of items approved for a more specific
application than standard parts. Creating a "phantom part" — a distinct
part number and application-specific list of approved sources — solves the problem of transferring
the engineering list into the manufacturing system. The preferred part can
be ranked as 1, and non-preferred alternate parts ranked as 2; a more
detailed preference ranking can also be applied (e.g., 9mm is ranked as 2,
while 10mm is ranked as 3). A phantom part can be
naturally represented in both PLM and MRP systems. It doesn't need to be inventoried under its own number, but
can be sourced from other inventory
locations.

Alternative approaches for representing your ALT parts

Consider these possibilities for identifying your alternate parts. Assume
that your internal part numbers 1001 and 1002 are both interchangeable on a
particular structure:

If there's no special reason to identify ALT parts separately from
normal parts, simply create a new part 1003 with parts 1001 and 1002 as
sources. You can also add supplier parts to 1003 that work only in this
application but aren't qualified as sources for 1001 or 1002.

Perhaps it's desirable to signal to the MRP system that it's
importing an ALT part. To uniquely identify ALT parts,
create a new Part Types member like
Alternate. Create the new
Alternate
part with a unique part number prefix like ALT- or with a normal
part number 1003. Add both parts 1001 and 1002 as sources.

Finally, it's possible to create 1003 to directly list all of
the sources for 1001 and 1002, without explicitly showing 1001 or 1002
as a source. While very simple to describe, this method implies that
there is a separate inventory bin for 1003 and, without also listing
1001/1002 as sources you may end up with unbalanced inventory in
separate locations.

It may take a bit of analysis - and probably some discussion with your
manufacturing staff and IT team - to determine which approach is preferable based on
your inventory management practices and MRP capabilities.

Contact us if you'd like to discuss how the
general concepts in this note may be applied to your situation.
We'd be happy to address other PLM software good practices — ask us!